Lockheed Martin awarded $105M for C2BMC Spiral 8.2 upgrades, including LRDR sensor management

Contract Overview

Contract Amount: $105,266,419 ($105.3M)

Contractor: Lockheed Martin Corporation

Awarding Agency: Department of Defense

Start Date: 2016-11-01

End Date: 2019-05-10

Contract Duration: 920 days

Daily Burn Rate: $114.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: IGF::OT::IGF THE PURPOSE OF THIS TO IS TO ASSESS CHANGES REQUIRED TO COMMAND AND CONTROL, BATTLE MANAGEMENT AND COMMUNICATIONS (C2BMC) SPIRAL 8.2 (S8.2) FOR INCREMENT 6 TO INCLUDE: SENSOR MANAGEMENT OF THE LONG RANGE DISCRIMINATION RADAR (LRDR); PROVIDE SYSTEM TRACK AND DISCRIMINATION DATA TO GROUND-BASED MIDCOURSE DEFENSE (GMD); DESIGN AND PROTOTYPE INITIAL ALGORITHMS; PROVIDE ENGINEERING SUPPORT OF THE GOVERNMENT-PROVIDED INTERFACE DEFINITION FOR LRDR MANAGEMENT AND SYSTEM TRACK DATA TO GMD (INCLUDING DEVELOPMENT-LAB TO DEVELOPMENT-LAB TESTING); AND EXECUTION OF A SUCCESSFUL PDR FOR C2BMC SPIRAL 8.2-5 (S8.2-5).

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80921

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $105.3 million to LOCKHEED MARTIN CORPORATION for work described as: IGF::OT::IGF THE PURPOSE OF THIS TO IS TO ASSESS CHANGES REQUIRED TO COMMAND AND CONTROL, BATTLE MANAGEMENT AND COMMUNICATIONS (C2BMC) SPIRAL 8.2 (S8.2) FOR INCREMENT 6 TO INCLUDE: SENSOR MANAGEMENT OF THE LONG RANGE DISCRIMINATION RADAR (LRDR); PROVIDE SYSTEM TRACK AND DISCRI… Key points: 1. Contract focuses on critical command, control, battle management, and communications (C2BMC) system enhancements. 2. Key upgrades include integrating Long Range Discrimination Radar (LRDR) sensor data and providing it to the Ground-Based Midcourse Defense (GMD) system. 3. The contract involves design, prototyping, and engineering support for system interfaces and testing. 4. Performance period spans over two years, indicating a significant development and integration effort. 5. The contract type, Cost Plus Incentive Fee (CPIF), suggests shared risk and reward between the government and contractor. 6. This award is part of a larger effort to modernize missile defense capabilities.

Value Assessment

Rating: good

The contract value of $105.3 million for a period of approximately two years appears reasonable for the scope of work, which involves complex system integration and software development for a critical missile defense component. Benchmarking against similar large-scale defense system development contracts suggests that the pricing is within expected ranges, especially considering the specialized nature of C2BMC and its integration with other advanced systems like LRDR and GMD. The CPIF contract type allows for cost control while incentivizing performance, which can lead to better value if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that only one contractor, Lockheed Martin Corporation, was deemed capable of performing the required work. This is common for highly specialized defense systems where existing knowledge, proprietary technology, or unique integration requirements limit the pool of potential bidders. While sole-source awards can streamline acquisition, they reduce opportunities for competitive pricing and may lead to higher costs compared to a fully competed contract.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The government relies on negotiation and oversight to ensure fair pricing.

Public Impact

The primary beneficiaries are the U.S. military and national security, through enhanced missile defense capabilities. Services delivered include critical software development, system integration, and engineering support for C2BMC. The geographic impact is national, supporting strategic defense infrastructure. Workforce implications include specialized roles for software engineers, systems engineers, and cybersecurity professionals within Lockheed Martin and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Complexity of C2BMC integration presents inherent technical risks.
Reliance on a single contractor for critical defense systems raises long-term dependency concerns.

Positive Signals

Contractor (Lockheed Martin) has extensive experience with C2BMC and missile defense systems.
CPIF contract type incentivizes contractor performance and cost efficiency.
Focus on specific, well-defined upgrades (Spiral 8.2) suggests clear objectives.
Integration with LRDR and GMD addresses key modernization needs.

Sector Analysis

This contract falls within the Information Technology and Defense sectors, specifically focusing on command, control, and communications systems for missile defense. The market for such specialized defense software and systems integration is dominated by a few large aerospace and defense contractors. Spending in this area is driven by national security priorities and the need to counter evolving threats. Comparable spending benchmarks would involve other large-scale defense system development and integration contracts, often in the hundreds of millions or billions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Given the sole-source nature and the specialized technical requirements, it is unlikely that significant subcontracting opportunities for small businesses will be mandated, though Lockheed Martin may engage them for specific components or services. The primary focus is on large-scale system integration, which typically involves prime contractors with established capabilities.

Oversight & Accountability

Oversight for this contract is likely managed by the Missile Defense Agency (MDA) program office, with potential involvement from the Department of Defense's Inspector General for audits and investigations. Accountability measures are built into the CPIF contract structure, linking contractor profit to performance metrics. Transparency is generally limited for sole-source defense contracts, but contract awards and high-level progress reports are typically made public.

Related Government Programs

Ground-Based Midcourse Defense (GMD)
Long Range Discrimination Radar (LRDR)
Command and Control, Battle Management, and Communications (C2BMC)
Missile Defense Agency (MDA) Programs
Ballistic Missile Defense Systems

Risk Flags

Sole-source award
Complex system integration
Potential for cost overruns in CPIF contracts
Reliance on single contractor for critical defense capability

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.3 million to LOCKHEED MARTIN CORPORATION. IGF::OT::IGF THE PURPOSE OF THIS TO IS TO ASSESS CHANGES REQUIRED TO COMMAND AND CONTROL, BATTLE MANAGEMENT AND COMMUNICATIONS (C2BMC) SPIRAL 8.2 (S8.2) FOR INCREMENT 6 TO INCLUDE: SENSOR MANAGEMENT OF THE LONG RANGE DISCRIMINATION RADAR (LRDR); PROVIDE SYSTEM TRACK AND DISCRIMINATION DATA TO GROUND-BASED MIDCOURSE DEFENSE (GMD); DESIGN AND PROTOTYPE INITIAL ALGORITHMS; PROVIDE ENGINEERING SUPPORT OF THE GOVERNMENT-PROVIDED INTERFACE DEFINITION FOR LRDR MANAGEMENT AND SYSTEM TRACK DATA TO G

Who is the contractor on this award?

The obligated recipient is LOCKHEED MARTIN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $105.3 million.

What is the period of performance?

Start: 2016-11-01. End: 2019-05-10.

What is Lockheed Martin's track record with the C2BMC program and similar missile defense systems?

Lockheed Martin Corporation has a long and extensive history as a prime contractor for the Command and Control, Battle Management, and Communications (C2BMC) program, serving as the developer and integrator for many years. They are a major player in the missile defense architecture, responsible for developing and producing key components and systems. Their experience spans various aspects of missile defense, including radar systems, interceptors, and command and control networks. This deep involvement provides them with significant institutional knowledge and technical expertise, making them a logical choice for sole-source awards on critical upgrades and sustainment efforts like this one. Their track record includes delivering complex systems under challenging timelines and technical requirements, though like many large defense programs, C2BMC has faced scrutiny regarding cost and schedule over its lifecycle.

How does the $105.3 million value compare to previous C2BMC Spiral development contracts?

Comparing the $105.3 million value directly to previous C2BMC Spiral development contracts requires access to historical contract data, which is not fully provided here. However, C2BMC development has historically involved significant investments, often in the hundreds of millions of dollars over multiple years for major spirals or increments. Given that Spiral 8.2 involves substantial integration efforts, including new sensor management (LRDR) and data provision to GMD, a value exceeding $100 million for a multi-year effort is plausible within the context of large-scale defense system modernization. Without specific comparable contract values for prior spirals, a precise benchmark is difficult, but the amount aligns with the complexity and criticality of the missile defense systems involved.

What are the primary technical risks associated with integrating LRDR sensor management into C2BMC?

The primary technical risks associated with integrating Long Range Discrimination Radar (LRDR) sensor management into C2BMC revolve around data compatibility, real-time processing, and interface standardization. LRDR is a new, advanced sensor, and ensuring its data streams are correctly formatted, transmitted, and interpreted by the C2BMC system in real-time is a significant challenge. This includes managing different data protocols, ensuring low latency for timely decision-making, and validating the accuracy and reliability of the sensor data within the broader C2BMC environment. Furthermore, developing and testing the algorithms for sensor management and discrimination requires sophisticated engineering and validation processes. Any missteps in these areas could compromise the effectiveness of the integrated missile defense system.

How effective is the Cost Plus Incentive Fee (CPIF) contract type in managing costs for complex software development like C2BMC?

The Cost Plus Incentive Fee (CPIF) contract type aims to balance cost control with performance incentives for complex projects like C2BMC. In a CPIF contract, the final profit is adjusted based on whether the final cost is below or above a target cost, and performance targets (e.g., schedule, technical milestones). This structure incentivizes the contractor, Lockheed Martin, to manage costs effectively while meeting program objectives. However, the effectiveness hinges on the government's ability to establish realistic target costs and performance metrics, and to diligently monitor the contractor's progress and spending. For highly complex, evolving systems where costs can be difficult to predict precisely, CPIF can be a suitable mechanism, but it requires robust government oversight to prevent cost overruns and ensure value.

What is the historical spending trend for C2BMC program development and sustainment?

Historical spending on the C2BMC program has been substantial, reflecting its critical role in the U.S. missile defense architecture. Over its lifecycle, billions of dollars have been allocated for its development, integration, and sustainment. Annual spending can fluctuate significantly depending on the phase of development (e.g., major spiral upgrades versus routine sustainment) and the specific components being addressed. Major development efforts, like the integration of new sensors or significant software overhauls, typically represent the largest single-year expenditures. The trend generally shows consistent, high-level investment driven by the ongoing need to adapt missile defense capabilities to evolving threats.

What are the implications of this sole-source award for future competition on C2BMC related contracts?

This sole-source award for C2BMC Spiral 8.2 upgrades suggests that Lockheed Martin's deep integration and established role within the C2BMC ecosystem continue to be leveraged. For future contracts related to C2BMC, particularly those involving sustainment, incremental upgrades, or integration of adjacent systems where Lockheed Martin holds significant intellectual property or existing infrastructure, sole-source or limited-competition awards may continue. However, the Missile Defense Agency (MDA) periodically reviews its acquisition strategies. Opportunities for broader competition might arise for distinct, modular components or entirely new systems that are designed with open architectures, allowing new entrants to compete more effectively. The long-term strategy for C2BMC competition will depend on evolving threat landscapes and technological advancements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ014711R0003

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp

Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20878

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $106,773,479

Exercised Options: $106,773,479

Current Obligation: $105,266,419

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HQ014712D0003

IDV Type: IDC

Timeline